In 1998, founding Bank of England Monetary Policy Committee member Sir Alan Budd delivered a speech concerned with how many variables a central bank should consider when setting policy. His discussion is especially relevant now, almost 16 years later, as Governor Mark Carney flits between unemployment, slack and wages for the purpose of communicating the MPC's likely policy stance. In practice, the BOE is a fox (it considers many things) but Carney can't resists talking like a hedgehog (reducing the forecast to a single variable). Sir Alan's 1998 speech contains interesting contributions to a range of monetary policy ... (full story)